Bombay HC stays order on floor space index in Panvel, will benefit local farmers

Farmers will now be able to command higher prices for their TDR, which they receive in exchange for land acquired for infrastructure projects

Navi Mumbai: The Bombay high court has granted an interim stay on the Maharashtra state government's order to the Panvel Municipal Corporation (PMC) to allot Floor Space Index (FSI) on payment of premium, in lieu of Transferable Development Rights (TDR) for construction projects in its jurisdiction. This decision brings significant relief to villagers in the Panvel region.

The ruling comes in response to two petitions filed against a 15 March order by the state urban development department. Representational Image. (Photo by Bachchan Kumar/ HT PHOTO) (HT PHOTO)

The court's interim order is expected to benefit local farmers, who will now be able to command higher prices for their TDR, which they receive in exchange for land acquired for infrastructure projects.

The ruling comes in response to two petitions filed against a 15 March order by the state urban development department. The petitioners, Pawan Kadam, a farmer, and Haresh Keni, a former PMC corporator and BJP leader, challenged a clause in the Unified Development Control and Development Regulation under the Maharashtra Regional and Town Planning Act.

The notification stipulated that within PMC jurisdiction, 75% of the total permissible TDR component could be utilised upon payment of a premium at 60% of the land rate mentioned in the annual statement of rates. The remaining 25% was to be utilised only in the form of TDR.

At least 11 villages in the PMC area contain privately owned land. According to existing norms, landowners receive TDR as compensation when their land is acquired for civic infrastructure such as roads and hospitals. Villagers typically sell this TDR to private developers at rates significantly higher than their land value. There is substantial demand for TDR for additional construction in CIDCO nodes of Panvel, New Panvel, Kalamboli, and Khanda colony.

Kedar Soman, Maharashtra Navnirman Sena Panvel president, who opposed the notification, said, "The government notification with order for immediate implementation came just a day before the Lok Sabha code of conduct came into effect. This despite former PMC commissioner Ganesh Deshmukh opposing such a proposal last year in September."

He added, "The notification is unjust for the farmers as FSI was now available very cheap. With additional FSI available from the civic body, the developers didn't need farmers' TDR."

Soman further explained, "The farmers had no reason to take TDR as it had lost its value. Also, the PMC would have to purchase the land by spending crores of rupees instead of acquiring it against TDR. Where are the funds with PMC for it?"

The high court initially ordered a status quo on 3 July, as the notification was to be implemented immediately without a hearing. The urban development department then issued a notice for a hearing on 6 July, which was conducted on 7 August. On 8 August, the court issued a similar stay order on the second petition. The next hearing is scheduled for 25 November.

Keni welcomed the order, stating, "We are thankful to the high court as hundreds of villagers will benefit from the stay. PMC too will be able to acquire land easily from the farmers, who otherwise would have refused monetary compensation, as the land price in their areas is not much. Now the developers will have no option but to purchase TDR being generated in the villages. PMC will get land sans having to spend and the farmers will get double the price for their land."

He further explained, "Farmers could get up to ₹15-20 lakh per guntha through TDR for land acquired from them. Due to the notification, developers could get the same development rights for substantially less. Why would they then purchase it from farmers?"

Keni also mentioned that they had raised concerns with both the government and PMC. He emphasised that farmers were not consulted, and the order appeared to primarily benefit developers' interests. He urged the government to withdraw the notification, warning that farmers would otherwise be reluctant to relinquish their land for infrastructure development.